Indian govt approves Vodafone-Idea merger

27 Jul 2018

Vodafone India and Idea Cellular have reportedly secured approval from the Department of Telecom for their planned mega merger to create India's largest operator by subscribers.

The department has approved the merger days after the operators made a joint 72.68 billion rupee ($1.05 billion) payment to the government for unpaid spectrum dues, Press Trust of Indiareported.

But the operators made clear they are making the payment “under protest” and plan to challenge the demands, the report states.

The dispute relates to the government's decision to demand payment for airwaves that were assigned to Vodafone administratively rather than through an auction process, with the size of the payment based on the market value of the spectrum. The total also includes a demand from Idea related to a one-time spectrum charge.

Meanwhile the two operators now expect the merger to close in August, the report states.

The planned merger will create an operator with around 430 million customers, giving the combined company a market share of around 35% and a revenue market share of 39%. This would dethrone Bharti Airtel with its 350 million subscribers as the market leader.

The merger will also reduce the Indian mobile market to three major private players – Vodafone Idea, Airtel and Reliance Jio Infocomm.

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